Globalive Said to Be in Talks to Buy Canada Rival Mobilicity

Dec. 20 (Bloomberg) -- Globalive Communications Corp., a
two-year-old Canadian wireless carrier, is in talks to buy
Mobilicity, adding a competitor to take on larger rivals BCE Inc.
and Rogers Communications Inc., according to a person familiar
with the discussions.

Globalive, backed by Amsterdam-based VimpelCom Ltd., is
targeting Mobilicity because it uses compatible wireless
frequencies, the person said. The purchase, which would increase
Globalive’s customer base by more than 50 percent, may come as
early as the first quarter of 2012, said the person, who
declined to be identified because the talks aren’t public.

Globalive, which operates under the Wind Mobile brand, is
trying to break the dominance of BCE, Rogers and Telus Corp.,
which control more than 90 percent of the country’s mobile phone
market. Globalive and Mobilicity were among new entrants that
bought spectrum in 2008 in a government auction designed to
increase Canadian wireless competition and cut mobile phone
prices.

“We have never commented on speculation like this before
and aren’t about to start now,” Mobilicity President Stewart
Lyons said today in an e-mailed statement.

Lyons took over from founder Dave Dobbin, who resigned last
month to pursue other interests, the Vaughan, Ontario-based
company said at the time. Mobilicity, which began operations in
May 2010 backed by New York-based Quadrangle Capital Partners,
has attracted about 250,000 customers, the company said, without
giving subscriber numbers.

Shelley Thomas, a spokeswoman for Toronto-based Globalive,
declined to comment on any talks.

Legal Challenges

Globalive has struggled to meet customer targets after
challenges from rivals over whether investment from its original
backer Orascom Telecom Holding SAE violated Canada’s foreign
ownership laws. Wind has about 400,000 customers in Ontario,
British Columbia and Alberta, lagging the pace needed to reach
its goal of 1.5 million customers in three years.

Acquiring Mobilicity would give Globalive more subscribers
to get back on track to that goal, the person said.

Cairo-based Orascom completed a $6.5 billion merger with
VimpelCom in April to create the world’s sixth-biggest mobile
phone operator. Orascom began talks with Public Mobile, another
new Canadian entrant, in late 2010 about merging with Globalive,
a second person said. Those talks ended in early 2011 when
Orascom began focusing on its VimpelCom deal, the person said.

Public Mobile was of interest to Globalive because it owns
wireless spectrum in Quebec that would give Globalive a national
footprint, the person said.

Android Phones

Alek Krstajic, CEO of Toronto-based Public Mobile, said the
carrier is ramping up its plans as an independent operator as it
moves beyond talk-and-text devices into selling smartphones
based on Google Inc.’s Android platform.

“We’re a little company that I think is going to surprise
a lot of people over the next year - and we just launched
Android,” Krstajic said in an interview today. Public had about
153,000 customers at the end of September, he said.

Rogers, Canada’s largest wireless carrier, had 9.29 million
mobile device subscribers at the end of the third quarter,
compared with 7.37 million for Montreal-based BCE.